Interspecific competition is observed when one species experiences reduced survivorship or fecundity, due to another controlling access to resources either through being superior at harvesting a shared resource (exploitation competition), or physically preventing the other species from accessing the resource, either through territory defence, or aggressive behaviour (interference competition). The aim of this project was to investigate the idea that a balance of exploitation competition and interference competition working together contributes to governing the current distribution of ship rats and Norway rats in New Zealand. The ship rat is the most abundant species, being widespread in native forest, while the Norway rat is largely restricted to farm buildings, rubbish tips, riparian sites and wharves. Chapter Two aimed to test the null hypothesis that there are no differences in the ability of the two species to harvest resources above the ground in native forest. An artificial forest was created with stands of various heights, representing small trees; with inter connecting ropes of various widths to represent branches rats might encounter in the forest. Individual rats were placed in the artificial forest and their activity recorded during the night. As expected, ship rats were significantly faster climbing up and down all the stands, as well as being faster traversing the various ropes. They also utilised the artificial forest much more than Norway rats. This ability of the ship rat to utilise this habitat may give them advantages in exploitation competition. Chapter Three aimed to test which species is superior at inference competition, when they meet on the ground. This was done using two methods: (1) inter- and intra- specific staged encounters in a small box, with a rat at each end, separated by a partition, with the rats behaviour remotely recorded, and (2) placement of the scent of the opposite species or the actual animal in a self contained cage somewhere within the artificial forest, which was used in the previous chapter. Ship rats appeared to be disturbed by the presence of Norway rats in the artificial forest, but they ignored displays of aggressive behaviour exhibited by the Norway rats during the staged encounters. Chapter Four describes an attempt to validate the results found in Chapters Two and Three in the wild, under natural conditions. A 480 metre long trap line, with 17 trap stations, 30 metres apart was placed on Rahui Island, Lake Waikareiti. Each station consisted of two Victor snap traps with covers, one on the ground and one 2.0 metres above the ground on a platform, with seven trapping nights. Ship rats were trapped on the forest floor and 2.0 metres above the ground, while only one Norway rat was trapped, on the forest floor. Chapter Five summarises the results from the previous chapters and also outlines possible avenues for future research in this area. The results described in this thesis are consistent with the prediction that the distribution of both species in New Zealand is governed by shifting advantages of exploitation competition and interference competition, mediated by habitat.